9911796707
TMI Blog2019 (1) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... 37,557/-. 2. The assessing officer (A.O. for short) in this case has made 12.5% addition on account of bogus purchase amounting to Rs. 1,37,557/-. 3. Upon the assessee's appeal, the ld. CIT(A) confirmed the same. 4. Against the above order, the assessee is in appeal before the ITAT. 5. Brief facts of the case are that the assessee is a firm which is engaged in the business of trading in timber. The return of income for the year under consideration was filed by the assessee declaring a total income of Rs. 28,760/-. Subsequently, on the basis of the information received from the Investigation Wing, Mumbai, with regard to the assessee had taken accommodation bill for purchase through parties declared as hawala operators by Maharashtra Sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... support of purchases made from the above parties is same as that made available by the Sales Tax Department to the Income Tax Department. 8. The AO in his aforesaid assessment order has further mentioned that the Sale Tax Department had conducted independent inquiries in the case of each hawala operator, including in the case of above stated hawala operator and it was conclusively proved that these parties/operators were engaged in the business of providing accommodation entries only. These parties mostly indulged in following activities: "a) issuing only bills and doing non-genuine business (Hawala Business); b) not maintaining stock and not keeping stock Register : c) not effecting any purchase; and d) there was no transaction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. The AO did not accept assessee's contention that the payment was made through banking channel and therefore, the purchases were genuine. Since, the assessee could not produce the abovementioned parties before the AO, it could not provide the evidences of the purchase like delivery challans, transport bills etc., and the assessee has not given any evidence which leads to the conclusion that the purchases were actually made by the assessee from the abovementioned parties and the said party actually existed. The AO has held that since purchases shown by the assessee during the year remains unverifiable, therefore is a possibility of leakage of revenue. The AO relying on various case laws mentioned in his order, held that purchases show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the assessee savings on account of nonpayment of tax and others at the expense of the exchequer. In such situation, in ourconsidered opinion, on the facts and circumstances of the case, 12.5 % disallowance out of the bogus purchases for the profit made thereupon meets the end of justice. Hence, the gross profit already shown by the assessee and offered to tax should be reduced from the standard 12.5% being directed to be disallowed on account of bogus purchase. This is to exclude double jeopardy to the assessee. Hence, we modify the order of the authorities below accordingly.
13. In the result, this appeal by the assessee stands partly allowed.
Order pronounced in the open court on 07.12.2018 X X X X Extracts X X X X X X X X Extracts X X X X
|
